Critics say Pa. DEP gas data has serious flaws

Aug. 20, 2012

Written by

Kevin Begos

Associated Press

Web graphic Marcellus Shale

More

ADVERTISEMENT

PITTSBURGH — When Pennsylvania released official data on Marcellus Shale natural gas production last week, there was no mention that numbers from Chesapeake Energy were missing, meaning the bi-annual totals weren’t close to being accurate. The firm has been a top producer in previous reports.

Energy and financial experts say such mistakes are a serious problem and just the latest example of sloppy and incomplete “official” data from the Department of Environmental Protection, which keeps reports on production and waste from the booming, multibillion-dollar resource.

“This is totally unprofessional. That’s very bad,” said Fadel Gheit, an oil and gas analyst with Oppenheimer & Co. in New York City.

DEP isn’t apologizing for not mentioning the missing data.

“Any analysis is incumbent upon the user to make his own interpretations,” DEP spokesman Kevin Sunday said in a statement Monday, adding that “what appears is what we have.”

Gheit said that DEP at least had the responsibility to let investors and industry know the posted production totals were incomplete, since financial markets and energy companies use them for long-term decisions involving billions of dollars. Several news stories were written off the reports, citing trends that don’t appear to be accurate, given the missing Chesapeake data, which was supposed to be submitted to DEP by Aug. 15.

“Ethically, they are obligated to conduct themselves in a better way,” Gheit said, adding that DEP’s staff “should be reprimanded” for how it handled the situation.

Chesapeake, which is based in Oklahoma City, didn’t immediately respond to a question about the data problem or when it might be fixed. Sunday said DEP is working to get an understanding of why some companies didn’t report and will update the website as it gets more data.

The Marcellus Shale is a gas-rich formation of rock thousands of feet below ground. Advances in drilling technology made the shale accessible, which led to a boom in production, jobs and profits, and a drop in natural gas prices for consumers. But there also are concerns about pollution and impacts to roads and other public services.

(Page 2 of 2)

Other industry experts say they understand the shale gas boom is a new thing for Pennsylvania, but that the reports could be substantially improved without much effort.

“We’ve heard complaints from people who want to invest in Pennsylvania. There’s a lot of frustration” with the data, said Will Brackett, managing editor of the Powell Shale Digest, an industry newsletter based in Fort Worth, Texas.

Brackett said past releases had duplicate entries and other mistakes, but the problem last week went far beyond that. Brackett said he can understand having an unexpected data problem — but not a state agency that doesn’t bother to mention such issues.

“I can’t believe that DEP didn’t put some sort of a disclaimer” on the website, he said, adding that “the final numbers were changing almost every day.”

The end result was that the Digest decided to hold off reporting the new production numbers from what is becoming the largest shale gas field in the nation.

“We don’t want to do anything until the numbers quit changing,” Brackett said, adding that the initial state report was “not worth the paper it’s printed on.”

Brackett said he is still hopeful that DEP’s reports will improve.

“I think it just comes with experience,” he said, adding that in recent years the agency “has gotten better, to some degree.” But he noted there are issues beyond the recent errors.

“Pretty much every other major oil and gas-producing state out there, requires the data to be reported on a monthly basis,” he said. Pennsylvania reports every six months.

Sunday said that DEP is following existing guidelines, and that they can’t provide more frequent production reports until the current legislation is amended.

“We very much would like every month. I think everybody in the industry would like it, too,” Brackett said. “I don’t understand why they can’t get a couple of college student interns. It wouldn’t be that difficult.”

The Marcellus Shale Coalition, an industry group, did not directly respond to questions about whether DEP should improve its gas production data, or move to monthly reports.

“As with any high-growth industry, there are inherent technical challenges in reporting such data,” said president Kathryn Klaber, who added that the semi-annual reports provide “a great deal of important data.”